QBE investors may have suffered over the last year but they are heartened by the measures the company has taken to keep investors informed, the Australian Shareholders Association told the insurer’s AGM last week.
Shareholders took the opportunity at the meeting to probe the company over the share price dive in December and the
AUS$280m net loss, which QBE, in the main, attributed to its North American operations.
Joyce Yong, of the Australian Shareholders Association (ASA), said: “The shareholders as you realised have suffered much over the last year, not only in terms of share price taking a steep dive in December but in terms of our dividend also diving as well but we are heartened by the measures you have taken and we appreciate your promptness in response to our requests for meetings to explain what went wrong so that we could report back to our constituency and we certainly hope we are on the path to better times.”
The abrupt December dive in the QBE share price has since become the subject of a
potential class action lawsuit being mounted by Maurice Blackburn.
QBE group chairman Marty Becker told investors that three key factors in the US came together “in a perfect storm at the same time and created an awful result for shareholders” – the mortgage crisis, weather-related patterns, and the crop insurance business, affected by rain and drought.
Earlier in the meeting, in his address to shareholders, group CEO John Neal took to reassure them. He said: “Whilst we are disappointed by the 2013 results we have taken the necessary steps to deal with underperforming portfolios, complete extensive management changes and succession planning across the group and we are well on the way to implementing transformation programs all of which will produce a solid base for our business in 2014.”
Investors raised concerns that QBE had awarded a ‘golden parachute’ of $1m cash and $800,000 deferred equity to newly-appointed North American operations CEO David Duclos.
ASA said it does not favour this practice but added: “We understand that sometimes companies have to do this to attract good people and we look forward to the turnaround of North America. We will be watching closely to see if the new remuneration arrangements contribute to the delivery of the turnaround.”
However, the association voted against the remuneration report, arguing that “some things could be better aligned with shareholder interests”.
Investors also disputed the appointment of
Margaret Leung’s directorship, expressing concerns that she will be “overloaded” as she is on a number of boards already.
Assuring investors that Leung is right and prepared for the role, Becker said: “QBE had the good fortune to work with Margaret in purchasing a piece of our business in Asia and became aware of her talents, skills, and relationships in a much more in depth way than we normally would.”
Becker said Leung had been there “every step along the way in a full time capacity with us”. “She is extremely competent and extremely dedicated to QBE and you are well –served,” he told investors.
The resolutions on Leung’s directorship and the remuneration report were passed. A third resolution to elect Becker as a director of the company was also passed.
